American Banker: Cheat sheet: Hopes and hang-ups on CRA reform

American Banker, November 25, 2018: Cheat sheet: Hopes and hang-ups on CRA reform 

The OCC received more than 1,300 comments on its advance notice of proposed rulemaking asking for responses on how to expand the 1977-era CRA, which grades banks on lending to low- to moderate-income communities in their branch networks. The comment period closed on Nov. 19.

Among the comment letters, many industry stakeholders backed expanding CRA assessment areas, state authorities warned the regulators not to reduce oversight of discriminatory lending practices and consumer advocacy groups urged the federal agencies to avoid any plan resulting in a loss of loans and investments in low- and moderate-income communities.

Several letters from consumer groups cited research by the National Community Reinvestment Coalition that found relaxing CRA requirements could lead to a 10-20% reduction in lending in low- and moderate-income communities and a loss of up to $105 billion in loans over a five-year period.

“In general, we’ve been supportive of changing the assessment areas to account for today’s technology and banking system but we have not been in favor of allowing more banks to get more CRA credit,” Jesse Van Tol, chief executive of the National Community Reinvestment Coalition, said in an interview.


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